A San Francisco jury ruled Friday in Tesla founder Elon Musk’s favor in a class-action shareholder lawsuit over his 2018 “funding secured” tweet, in which the entrepreneur questionably claimed to have financing lined up to take Tesla (NASDAQ:TSLA) private.
“Thank goodness, the wisdom of the people has prevailed!” Musk tweeted Friday after jurors in a federal civil trial found on his behalf. “I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”
Class-action lawyers representing shareholders of Tesla (TSLA) sued over an Aug. 7, 2018, tweet in which Musk wrote: “Am considering taking Tesla private at $420. Funding secured.”
The tweet sent TSLA soaring 11% to $387.46 that day, although the stock failed to reach $420 as the take-private idea foundered. It also turned out that while Musk had talked to Saudi investors about providing financing for a take-private deal, such funding arguably wasn’t truly “secured.”
TSLA stock eventually sank as much as some 35% intraday a month after Musk’s tweet, and the take-private deal never went forward.
The U.S. Securities and Exchange Commission had previously sued Musk over the incident, reaching an out-of-court settlement in which he and Tesla (TSLA) each paid $20M and Musk gave up his chairmanship of the EV maker. Friday’s jury verdict came in an unrelated case brought by individual shareholders.
Musk last month testified in his own defense at the San Francisco trial, saying that the Saudi investors he spoke with “unequivocally” wanted to help take the company private.
And while Telsa (TSLA) originally fell when the take-private deal came apart, the stock later began a multi-year rally. In November 2021, TSLA peaked some 1,500% above its Aug. 7, 2018, high after factoring in stock splits.
Even with TSLA’s big pullback over the past year, the stock’s close Friday at $189.98 represents a more than 635% gain from its Aug. 7, 2018, high after taking stock splits into account.
Seeking Alpha contributors are split on where Tesla (TSLA) goes from here. Columnist Alpha Investment Research recently laid out a “Buy” case for the stock, while contributor Sean Chandler gave TSLA a “Sell” rating.